My thoughts:
1. Yes, giving room is very important. Using the L/R look buttons is important as well.
2. There seems to be some confusion about the "racing line" so to speak. Some believe that the person who is ahead at the point of turn in has the racing line(even if on the outside of the other car), others believe even if someone is a half car in front and they themselves are on the inside of the turn that THEY have the line and the other car should yield.
3. A lot of it has to do with the 5 lap races as most people will agree, because often the race is won in turn 1 @ blackwood with a 5 lap race.
4. (and this i think is the big one). If its a 5 lap race, it'll be over in 6 or 7 minutes anyway, just race again! Its not the end of the world if you DO manage to get bumped or put into the wall. The rediculous arguments that ensue are distracting to those of us who were not involved and are still racing (like when trying to see the "arcady" map). As long as the person at fault (or both parties) can say they are sorry and wait a few minutes, i dont see the big deal. I'll agree its frustrating, especially as I notice myself getting faster and further to the front, but again....its only a 5 lap race. there will always be another.
You'll never solve the problem on public servers, no matter how many educated racers you have.